Speaking to Knesset Members at a Foreign Affairs and Defense Committee session, Diskin warned that PA terror groups are paying attention to the mistakes made by Israel in the war with Hizbullah in southern Lebanon.

“Samaria has become the land of Islamic Jihad following the Disengagement,” he told the committee. Diskin added that Judea and Samaria have become much harder to control since four Jewish communities in northern Samaria were destroyed by the Israeli government in 2005. Intelligence gathering has also become much more difficult, he said.

The senior intelligence community official spoke of the decay of law and order throughout PA-controlled areas in Judea and Samaria. Hizbullah is becoming a greater threat than even Fatah and Hamas within these areas.

Smugglers are bringing guns, rockets, missiles and other materiel into Gaza with impunity at this point, he said, despite the presence of Egyptian forces there. The list of weapons and ammunition that smugglers have managed to bring into Gaza is stunning: some 4 million bullets, more than 17,000 guns and pistols, 3 dozen rockets, dozens of anti-tank missiles, 400 RPGs, 15 tons of TNT and up to 15 Katyusha rockets of the type fired from southern Lebanon at northern this summer.

“At this point, anyone who wants to smuggle something through the Philadelphi route [into Gaza] can do so. You can smuggle anything through … except maybe a tank or plane,” said Diskin. He warned that within 3-5 years, the Sinai will become a major route for the import of arms for terrorists. "Sinai will become a major threat to Israel if the current trend is permitted to continue," he said.

Following Diskin's presentation, some of the committee members said it has been some time since they have heard such a pessimistic briefing.

During the war, he added, the IDF refused the Shin Bet's offer to assist the IDF with interrogations of captives taken from southern Lebanon. Shin Bet professionals, he maintained, use better interrogation methods and are more effective at extracting information from terrorists.

Likud MK Natan Sharansky supported Diskin’s contention that the bleeding at the border must be stopped in order to prevent a southern Lebanon situation from developing in Judea and Samaria.

“For ten years we have been hearing these types of reports, but there has never been such an immediate need for action,” Sharansky pointed out. “Every kind of weapon is getting into the Gaza Strip, and Hamas is establishing a terrorist army.”

Taking an obvious swipe at Defense Minister and Labor Party Chairman Amir Peretz – who has claimed that he was not told about the Katyusha threat in the north when he took over the ministry – Sharansky added, “It is no longer possible to say they didn’t warn us.”